Meat Groups Lose Bid to Block Country-of-Origin Labeling

Tyson Foods Inc. is among meat producers that lost a bid to suspend new country-of-origin labeling rules as a U.S. appeals court said the requirements don’t violate free speech rights or exceed regulators’ authority. Photographer: Andrew Harrer/Bloomberg

March 28 (Bloomberg) -- North American meat producers
including Tyson Foods Inc. and Hormel Foods Corp. lost a bid to
suspend new country-of-origin labeling rules as a U.S. appeals
court said the requirements don’t violate free speech rights or
exceed regulators’ authority.

The U.S. Court of Appeals in Washington said in a decision
today that groups seeking to delay the rule until a lower court
decides the merits of their case are unlikely to succeed in
either their free speech arguments or their claim the U.S.
Department of Agriculture had gone too far with its labeling
demands.

The regulations, which were adopted in May and took full
effect in November, require producers to specify the country or
countries where an animal was born, raised and slaughtered.
Retail packages can’t mix muscle cuts from different countries
under a general label.

Country-of-origin labeling is opposed by meatpackers, who,
led by the American Meat Institute, claim that it forces them to
segregate animals and raises costs.

“The AMI’s argument that the rule unlawfully ‘bans’
commingling fails at a key first step -- the 2013 rule does not
actually ban any element of the production process,” U.S.
Circuit Judge Stephen Williams wrote for the three-judge panel.
“The necessary changes to production are, to be sure, costly
for the packers,” he said.

Production Cycle

A 2009 version of the rule didn’t require explicit
identification of the country of origin for each step in the
production cycle. Instead, it called for a simple label with a
phrase starting with “Product of,” followed by mention of one
or more countries. The earlier version also allowed the practice
of “commingling,” whereby a company could use a simple label
for meat processed from animals with different countries of
origin on a single production day.

Canada and Mexico complained successfully to the World
Trade Organization that imprecision in the labeling unfairly
hurt their exports, hoping the labels would be struck down. The
USDA instead made the wording more precise in the updated rule,
requiring the specific information on where meat was born,
raised and slaughtered, arguing that doing so complies with the
WTO decision.

Michelle Saghafi, a spokeswoman for the USDA, didn’t
immediately return a phone call seeking comment on the ruling.

James H. Hodges, the interim president of AMI, said in a
statement that the group disagrees with the court’s decision and
is evaluating its options.

Divided Industry

The issue has divided the U.S. livestock industry. Some
American producers favor the labeling because it enables
consumers to identify domestically produced meat. Others object,
saying it the costs outweigh any benefit.

Meat industry groups including the Canadian Cattlemen’s
Association and the National Pork Producers Council appealed
U.S. District Judge Ketanji Brown Jackson’s decision in
September declining to put the Department of Agriculture
labeling regulation on hold because the opponents hadn’t shown
they’d suffer irreparable harm. Arguments on the merits of the
case favored the government, she said.